Many companies at one time or another receive a letter from a law firm demanding that they cease and desist from using a specific name or design in connection with a product, business practice or advertisement. The company on whose behalf the letter is sent is trying to accomplish several things. First, of course, it would like to have the recipient of the letter conform to the demand and stop using the trademark. A second, and generally unstated, reason for the letter is to show later parties and even courts that the company has vigorously enforced whatever trademark rights the company has in the mark.
Evidence of vigorous prior enforcement can help transform a descriptive word or phrase with little or no protection into a strong mark.
A CASE IN POINT
To illustrate this point, imagine the plight of a drapery retailer called “Windows and Things” that has operated a few stores in the suburbs of an American city for the past 10 years. The stores sell draperies, window coverings and an assortment of home decorating accessories.
One day, the owner of the stores receives a certified letter, return receipt requested, from a downtown law firm that represents a fast-growing chain of stores also called “Windows and Things.” The chain store sells many of the same products sold by the local store and is rumored to be opening a new mega-store in the mall. The letter reads as follows:
Dear Sir or Madam:
We represent Windows and Things, LLC, a Delaware limited liability company, which owns United States registered trademark #123456 covering the mark WINDOWS AND THINGS (the “Registered Trademark”). A copy of the Registered Trademark is enclosed.
It has come to our attention that you are infringing the Registered Trademark by operating a retail establishment under the name Windows and Things. Notice is hereby given that this activity constitutes a direct and willful infringement of the Registered Trademark. This firm has been instructed to exercise any and all remedies available under the law to protect our client’s rights in the Registered Trademark, including instituting legal proceedings for injunctive relief and monetary damages. This firm will undertake such action unless, within 10 days of the date of this letter, you cease and desist from infringing the Registered Trademark.
Dim & Witty LLP
The letter has its intended effect on the owner of the store, who
is frightened and feels wronged by the demand. But the trademark
registration document enclosed with the letter looks very official
and has the seal of the U.S. Patent and Trademark Office on it.
The owner begins to calculate the cost of hiring his own lawyer
to respond to the letter. He also thinks about the impact of having
to change the name of his store. What would this do to his business?
What would he tell his customers?
The owner decides to call his attorney before capitulating. The attorney does a little investigating, including a quick check of the trademark on the Web site of the U.S. Patent and Trademark Office. There, she learns that the registration covers only the specific form of graphic presentation used by the company to render the phrase Windows and Things. The registration doesn’t actually cover the phrase itself, just the graphic depiction currently in use by the chain.
The attorney calls her client and explains that the key issue in trademark infringement is whether a consumer is likely to be confused by the names used by competing parties. The degree of confusion depends on the strength of the mark, the degree of similarity between the marks, how close together the products or services are in the marketplace and other similar issues.
The attorney also explains the following:
• The fact that the chain store obtained a federal registration for the trademark doesn’t eliminate the rights of the local store in the name. Trademark rights in the United States are based on the actual use of the mark, not registration with the Patent and Trademark Office.
• The chain store has been using the name Windows and Things for the past three years in other cities and has adopted a national advertising campaign through cable television and advertisements in national magazines. The local store has been using the name for 10 years and has advertised the name through local radio and newspaper channels. Many people in the area are familiar with the name of the local stores and they enjoy good customer support in their market.
• The local store has a stronger right to use the name in its area than the chain store.
• The name Windows and Things is not a very strong mark. It probably falls under the category of “descriptive” marks; that is, marks that describe something about the product or service. Marks that are arbitrary and fanciful (such as “Cingular” or “Altria”) have the strongest protection, as they are most likely to designate a particular source of the product or service. Marks that are “suggestive” (such as “Citibank”) suggest something about the product or service, and these also enjoy strong trademark protection.
But marks that merely describe the product or service are weak, as they don’t by themselves identify the source of the product or service. Descriptive marks can become stronger over time as they acquire an association with a single source through advertising and customer familiarity.
• The federal registration owned by the chain store covers only the specific graphic depiction of the mark, not the phrase itself. The local store uses a similar name with a different graphic display. The distinction is important, because infringement of this kind of trademark occurs only where the competing mark uses the same or a very similar graphic depiction.
• The local store’s continuous use of the trademark in the suburbs of the city gives it priority over the chain store in that area. The chain store doesn’t have the right to force the local store to change its name in this area. If the local store wants to open stores in another area, it would have trouble doing so under that name.
• Because the local store is the prior user in its area, it may have the right to block the chain store from using the name Windows and Things in this area. The owner discussed with his attorney how they might take advantage of this leverage. They decided to pursue a strategy of trying to push the chain store to the other side of town where it wouldn’t be as much of a competitive threat (or source of confusion).
The bottom line is that trademark rights are based on actual usage. A small company may have rights to a trademark or trade name in its market that are as strong or even stronger than the rights of companies that spend a good deal of time and money on consumer advertising. The next time a cease and desist letter arrives, look into the matter closely. Your rights may be stronger than you think.
Editor’s Note: This article is intended to be of general help with some of the many issues that businesses in the window coverings industry face. It is not intended to replace the specific advice of an attorney in a specific case.
Geoffrey Parnass is an attorney who practices with the law firm Vandenberg & Feliu in New York. He can be contacted at (212) 763-6820.